Fast food jobs cost taxpayers, study says

FILE - In this Aug. 29, 2013, file photo, protestors demonstrate outside a fast-food restaurant in Los Angeles. Thousands of fast-food workers and their supporters have been staging protests across the country to call attention to the struggles of living on or close to the federal minimum wage. The push raises the question of whether the economics of the fast-food industry allow room for a boost in pay for its workers. (AP Photo/Nick Ut, File)
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FILE - In this Aug. 29, 2013, file photo, protestors demonstrate outside a fast-food restaurant in Los Angeles. Thousands of fast-food workers and their supporters have been staging protests across the country to call attention to the struggles of living on or close to the federal minimum wage. The push raises the question of whether the economics of the fast-food industry allow room for a boost in pay for its workers. (AP Photo/Nick Ut, File)
/ AP

Fast-food workers in California make so little money that taxpayers spend more than $700 million annually on government programs to assist their ability to live, a study released Tuesday says.

The study, jointly produced by the University of California Berkeley and the University of Illinois, reports that across the country taxpayers are spending $7 billion per year on programs such as food stamps, tax credits and health insurance for fast-food workers, who earn a median $8.69 per hour.

The report was released at time when labor unions are putting pressure on fast-food restaurant operators to pay at least $15 per hour to their workers.

California costs

Here are details from the study about programs used by fast-food workers in California:

Employment: 227,000

Earned income tax credit: $201 million

Medicaid: $244 million

Children’s Health Insurance Program: $151 million

Food stamps: $86 million

Other assistance: $35 million

Total annual cost: $717 million

Source: UC Berkeley, University of Illinois

UC Berkeley economist Sylvia Allegretto said in a statement accompanying the data that low-paying jobs at fast-food restaurants are costly for government programs.

“This is the public cost of low-wage jobs in America,” she said. “The cost is public because taxpayers bear it. Yet it remains hidden in national policy debates about poverty, employment and public spending.”

Scott DeFife, executive vice president of the National Restaurant Association, countered that the data paint an inaccurate picture.

“America’s restaurant industry provides opportunities for millions of Americans, women and men from all backgrounds, to move up the ladder and succeed,” he said in a statement.

“These misleading efforts use a very narrow lens and selective data to attack the industry for their own purposes and fail to recognize that the majority of lower-wage employees works part-time to supplement a family income,” he said. “Moreover, 40 percent of line staff workers in restaurants, the primary focus of the reports, are students.”

California’s minimum wage will increase to $9 per hour on July 1, 2014, and $10 per hour in January 2016, according to a bill recently signed by Gov. Jerry Brown.

In August, fast-food workers and their supporters took to the streets across the country to demand a minimum $15 per hour. That was reiterated on Tuesday in Mission Valley, when a handful of demonstrators spoke outside a McDonald’s in light of the study.

“Taxpayers are picking up annually a $7 billion tab for low-wage fast-food workers because so many fast-food workers need to rely on public assistance to make ends meet,” said Elizabeth Maldonado Robinson, program coordinator for the Interfaith Committee for Worker Justice of San Diego County, which organized the demonstration.

Raquel Niri, who makes $9.55 per hour for 24 hours per week at a Wendy’s downtown, said her wage went up 50 cents while her rent went up $50. She said she receives food stamps to help support her seven children.

According to the report, California’s annual cost is the highest in the nation, at $717 million. New York pays $708 million, while Texas comes in third at $508 million.